Bio-diesel Power Generatiion And Seawater Desalination Pre Feasibility Study

BIOFUEL-DRIVEN POWER GENERATION AND SEAWATER DESALINATION FOR POTABLE WATER SUPPLY AND SALT PRODUCTION IN SMALL ISLAND AND REMOTE COASTAL COMMUNITIES

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SOPREX Foundation SOPREX/MIND-BIOS Bldg., MSU-IIT Campus A. Bonifacio Ave. Tibanga, Iligan City. 9200 (063) 223-8077 / FAX: (063)2238481

INVESTMENT OPPORTUNITY PROJECT BRIEF: Biofuel-Driven Power Generation and Seawater Desalination for Potable Water Supply and Salt Production in Small Island and Remote Coastal Communities Prepared By: SOPREX Foundation MSU-IIT Campus, Tibanga, Iligan City

I. PROJECT CONCEPT This Project harnesses local bio-fuel resources to meet two very basic needs of small island and remote coastal communities: electricity and water. To bring down the operating costs and user charges of existing small diesel generating sets, the Project shall demonstrate and validate the technoeconomic viability of using coconut oil as bio-diesel fuel. The Project shall thus be anchored on and complement the operations of a closely related investment, a village-scale coconut processing plant The use of coconut oil as diesel substitute or fuel blend for diesel engines has already been established as technically feasible. The rising cost of diesel fuel and the depressed prices of copra, especially in these target communities who absorb their higher transaction cost of copra trading, also created its economic feasibility. The bio-fuel power plant shall buy the coconut oil from the village coconut processing plant at the same price as diesel fuel which, at current prices, is equivalent to the plant-gate price of copra. The latter shall in turn be able to pay the farmers better terms for their copra and even much better terms for their whole nut harvest. The pre-feasibility study shows its capacity to pay the coconut farmer a stable whole nut price of P3.50 per piece, which yields the farmer a higher unit gain. The Project shall tap the waste heat from its bio-diesel power generation to desalinate seawater and produce potable (distilled and purified) water and the by-product salt.

II. PRELIMINARY COST-BENEFIT ANALYSIS The 80KVA diesel power plant is estimated to have an operational power supply capacity of 60KW. This is sufficient to energize up to 1,500 households (3-5 adjacent barangays) and up to10 rural industries at an average power demand of 5KW. The total investment cost is estimated at approximately PhP 2.4 million. The power consumers shall enjoy not only a stable service for longer periods, up to 8 hours night-time service to households and up to 10 hours day time power supply to small industries and institutional establishments. At the lower cost of PhP3.50 per kwhr for households and a premium rate of PhP2.50 for industrial consumers, the Project shall generate an annual gross income of PhP7.41 million and a net operating income of PhP5.3 million.

PROJECTED ANNUAL INCOME STATEMENT Coastal Barangay Biodiesel Power & Seawater Desalination/Purification System AMOUNT REVENUES (PhP) Electric Service: 1,500 HHs @ 50kwh/mo @ PhP3.50/kwh 3,150,000 10 SMES @ 2000kwh/mo.@ PhP2.50/kwh 600,000 50 KW Demand Charge @ PhP100/KW/mo 60,000 Sub-Total 3,810,000 Potable Water Supply: 100,000 lpd @ PhP0.10 per liter (PhP2 per 20-liter container) 3,600,000 Total revenues from basic services 7,410,000 Add: Other Income Crop drying fees: 10,000 kg/day @ PhP1.00 3,600,000 Salt: 3200 kg/day @ PhP2.50 2,880,000 Total Other Income 6,480,000 TOTAL REVENUES 13,890,000 EXPENSES Labor: 10 workers @ PhP60,000/yr 600,000 Biodiesel fuel: 1 liter/hr/kw X 60KW X 18 hrs X 300 days X PhP15/liter 5,832,000 Depreciation & Other Production Overhead 126,000 Administrative/Selling Overhead 2,083,500 TOTAL EXPENSES 8,641,500 OPERATING INCOME 5,248,500 ROI 218.7% PAYBACK PERIOD (MOS.) 5.5

ESTIMATE OF TOTAL PROJECT COST

TOTAL PROPONENT

1. a. b. c. d. 2. a. b. c. d. e. 3.

Pre-Operating Expenses Plant Design & Supervision of Fabrication Works Preparation of Pre/Detailed Feasibility Study Participatory Proj. Planning & Management Dev’t. Skills Training & Technology Transfer Sub-Total Acquisition of Fixed Assets Land Buildings & Other Improvements Plant Machinery & Equipment Office/Laboratory Equipment Transport Equipment Sub-Total for Fixed Assets Working Capital: 1 mo. TOTAL % Share

LOCAL EQUITY (LGUs/ POs)

EXTERNAL PARTNER GRANT/ LOAN

100,000 100,000 150,000 250,000 600,000

25,000 25,000 200,000 250,000

-

100,000 75,000 125,000 50,000 350,000

50,000 150,000 600,000 150,000 150,000 1,100,000 700,000 2,400,000 100.00%

250,000 10.42%

50,000 50,000 100,000 50,000 150,000 6.25%

100,000 600,000 150,000 150,000 1,000,000 650,000 2,000,000 83.33%